The Debt Management Office (DMO) has disclosed that the Federal Government raised N162.56 billion (about $450 million) through the sale of Islamic bonds to local funds and insurance companies, to help finance infrastructure projects.

A news report by Financial Times quoted the DMO as saying that the government had planned to sell N150 billion of the sukuk in its third outing but increased the size of the offer after it received a more than four-fold subscription. 

The debt management agency stated that it would issue more bonds to improve infrastructure and plans to use the proceeds of the Sukuk sale to finance 44 road projects across the country. It did not give the maturity or the yield for the naira-denominated bonds.

The Federal Government under its Debt Management Plan had earlier listed a series of debt issues this year before the COVID-19 pandemic disrupted its fiscal projections and compelled it to suspend foreign commercial borrowing. 

As a preferred option, the fiscal authorities are now exploring domestic markets and concessionary loans to partly bridge the 2020 budget deficit already worsened by lower crude oil prices at the international market. 

Largely depending on crude oil earnings to fund its yearly budgets, Nigeria is currently contending with foreign currencies, particularly dollar, shortages, with the economy projected to contract as much as 8.9% this year.

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